Internet GB retail sales growth flat in July

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Yesterday was the third Thursday of the month so The Office for National Statistics (ONS)  published the monthly retail sales figures for June (pdf) We’ve cut the pdf down to exclude the 86 pages of tables. If you want the full version it’s on the ONS site.

The overall  figures were well received with many pleasantly surprised by their strength with some hopes for a resultant upward revision to generally gloomy GDP forecasts.

Our Internet sales headlines:

July increases:

  • Year on year +14.2% (+13.7%) almost flat after June revision down from 14.3%
  • Year to date July 2012/2011 + 17.3% (17.8%) a marginal reduction again on a small upward revision (+0.2%) to June’s figures.
  • Moving Annual total increases (1) on June 2012 annualised + 11.2% (2) on June 2011 +16.6%
  • The UK’s *largest online retailer is included in the group (Non store retailing) showing 16.7% growth on 2011 and contributing 6.9% to the overall growth of 14.3% (This is an area which is likely to just grow & grow unless further meaningful analysis is undertaken by the ONS)

As always the “history” has been revised by the ONS which this month went back as far as July 2011 with the majority of changes relating to earlier this year but with no really significant revisions most of which were < 1% in any month.

The ONS words are:

“Internet Sales

 Key points

  • Average weekly Internet sales values (non-seasonally adjusted) in July 2012 were estimated to be £505.1 million, which is an increase of 14.2 per cent when compared with July 2011.
  • Internet sales were estimated to account for 8.5 per cent of all retail spending excluding automotive fuel.
  • The non-store retailing sector had the largest proportion of Internet sales in July 2012 accounting for 63.3 per cent of all spending in this sector, up from 60.7 per cent in July 2011. The food sector had the lowest proportion of Internet sales accounting for 2.4 per cent, down from 2.5 per cent a year earlier.

Internet sales in detail

Internet sales measure how much has been spent online through retailers in Great Britain. Figures are non-seasonally adjusted and the reference year is 2010=100. Table 3 shows the year-on-year growth rates for total Internet sales, by sector and the contribution that each sector makes to total Internet sales.

Table 3, Internet sales

Category Weight  Year on year Contribution
 (YoY) growth  to YoY growth
All retailing  100.0 14.2%
(a) All food 17.3 -3.2% -0.6%
(b) All non-food 41.4 16.0% 6.6%
Department stores 7.0 31.3% 2.2%
Textile clothing & footwear stores 11.7 23.5% 2.7%
Household goods stores 8.2 11.0% 0.9%
Other stores 14.5 3.1% 0.4%
(c) Non store retailing 41.3 18.7% 7.7%

We have added our annotations to the ONS table) – The bold categories/ figures in the table are the primary constituents of the total (ie (a) + (b) + (c) = All retailing). Dept. stores, Textile etc, Household etc and Other stores are simply an analysis of (b) All non-food.

* Whilst the ONS will not confirm the names of specific retailers within categories they did say that retailers selling wholly online with no physical outlets would be included in the Non store retailing category along with eg online  mail order retailers.

As previously mentioned the figures are no longer experimental.

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The moving annual total, which we report, moved up again (it has increased EVERY MONTH since October 2007 being the first full year of reporting by the ONS) to an all time high of £27.3 billion an increase in the month (adjusted re restatements and revisions) of 0.93% annualised 11.1%. This is the second lowest increase this year and well below the long term compound average growth rate (from 2007) of 25.8%.

The weekly results were well below (4.7%) of our last months forecast of £525 million and according to the ONS “The July trading period covered two days of the Olympic Games; 27 and 28 July. Feedback from retailers suggests that there has been no impact on sales from the Games in this trading period.”  We were also a little over optimistic on the annual figures which at £27.3 billion were £0.2 billion short of our estimate. Unlike the ONS we are looking for some London 2012 contribution this month and will hence go for weekly and annual figures of  £510 million and £27.6 billion!

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We have again included our experimental graph (e & o e!) showing the relative internet and non-internet, moving annual total, sales from late 2007 by month. As before it highlights that high street sales have been and continue to go nowhere! As, we have mentioned before, the Boston Consulting Group forecast  in their report (The $4.2 Trillion opportunity) that this trend is likely to continue with the high streets market share contracting at around 2.75% a year from 2010 through 2016.

Further details and explanations are either in the ONS release on the statistics or on their website. As previously mentioned a retail convention of a 4, 4, 5 week quarter is used by the ONS. To cater for the inconvenience of years not having 364 days every 6 years or so an extra week is included in the statistics. The ONS adds this in January.

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